In August 2011, the National Labor Relations Board issued a rule requiring employers subject to Board jurisdiction to post a “Notification of Employee Rights under the National Labor Relations Act.” The required poster provided employees with a comprehensive listing of their rights under the National Labor Relations Act, including a detailed list of what the NLRA prohibited their employers from doing.

Under the new rule, employers that failed to post the notice on their property, and on their intranet and websites, would be guilty of an unfair labor practice. An employer’s failure to post the notice also tolled the NLRA’s limitations period for filing unfair labor practice charges, and could be used against an employer as evidence of illegal motive in other, unrelated unfair labor practice charges.

When the National Labor Relations Board proposed the rule back in December 2010, the board’s stated purpose was to educate employees not already represented by unions about those employees’ rights under the NLRA. The board was particularly concerned about educating immigrant workers, and high school students entering the workforce. In proposing the rule, it was the board’s belief that the workplace was the best place to communicate its message, knowing that the rule would impact nearly 6 million employers, the bulk of which were small businesses.

Recently, in National Association of Manufacturers v. NLRB, 12-5068, 2013 WL 1876234 (D.C. Circuit, May 7, 2013), the U.S. Court of Appeals for the District of Columbia Circuit declared that rule invalid. The court held that the posting rule created “a new species of unfair labor practice unforeshadowed in the NLRA’s text,” and that nothing in the National Labor Relations Act authorized the board “to impose on an employer a freestanding obligation to educate its employees on the fine points of labor relations law.”

The D.C. Circuit rested its decision in large part on Section 8(c) of the NLRA. Section 8(c) essentially allows an employer to express and disseminate its views about the union to its employees as long as the employer’s expression does not contain threats of reprisal or threats of force against the employees, and as long as the employer does not promise its employees a benefit. Practically speaking, section 8(c) prevents the board from charging an employer with an unfair labor practice for posting a notice informing employees of their right not to join a union. Therefore, the D.C. Circuit held, the board’s new posting rule violated section 8(c) by making it an unfair labor practice for an employer to refuse to post a notice informing employees of their right to join a union, holding that “the right to speak” includes “the right not to speak.”

Continuing Trend

While the D.C. Circuit effectively curtailed the board’s overreaching in National Association of Manufacturers, the unfortunate reality is that NLRB excess is becoming something of a trend. Just five months before, the same court had stepped in to vacate an NLRB order in Noel Canning v. NLRB, 705 F.3d 490 (D.C. Circuit 2013).

There, the judges held that President Barack Obama’s recess appointments were not constitutionally valid and, therefore, the NLRB could not lawfully act when it issued its order. Shortly thereafter, the Unites States Court of Appeals for the Third Circuit, in NLRB v. New Vista Nursing & Rehabilitation, 11-3440, 2013 WL 2099742 (3d Cir. May 16, 2013), vacated NLRB orders on the grounds that the board panel below lacked the authority to act because one panel member was invalidly appointed during an intra-session break.

The Noel Canning board is now seeking review of the D.C. Circuit Court’s decision in the U.S. Supreme Court. Given the congruity of the Third Circuit decision, however, the far-reaching effects of Noel Canning, remain uncertain. According to the U.S. Chamber of Commerce, as of May 13, 2013, the NLRB has issued 208 decisions since Noel Canning was decided, and at least 1,178 decisions since August 2011. Every one of those decisions could now be called into question on the basis that the board could not lawfully act at the time it decided the case.

Similarly, last year around this time, in Chamber of Commerce of U.S. v. NLRB, 879 F. Supp. 2d 18 (D.D.C. 2012), the U.S. District Court for the District of Columbia held invalid an NLRB rule that amended the procedures for determining whether a majority of employees wanted union representation. Under the rule, the period between the filing of a petition and an election would have been reduced from a median of 38 days to as few as 10 days.

Union Advantage

The shortened time frame would have been a significant advantage to unions, as an employer would have less time to explain to its employees why the union may not be in their best interest, or in the employer’s. In the Notice of Proposed Rulemaking, dissenting NLRB member Brian Hayes summed up the “principal purpose” of the rule:

“[B]y administrative fiat in lieu of Congressional action, the Board will impose organized labor’s much sought-after “quickie election” option, a procedure under which elections will be held in 10 to 21 days from the filing of the petition. Make no mistake, the principal purpose for this radical manipulation of our election process is to minimize, or rather, to effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining.”

Ultimately, the District Court found that rule invalid because the NLRB had adopted the rule without the statutorily required quorum. In setting aside the rule, and holding that the board had exceeded its authority, the Court held: “The NLRB is a ‘creature of statute’ and possesses only that power that has been allocated to it by Congress. . . Indeed, it is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.”

While this should not be news to the National Labor Relations Board, it is yet to be seen if that simple truism, and lessons learned in this recent spate of cases will be enough to restrain the board going forward, or if intervention by the courts will become a routine antidote to board excess. •